GameStop spikes another 91% as Reddit investors push stock to dizzying new highs

Advertisement
GameStop spikes another 91% as Reddit investors push stock to dizzying new highs
Gamestop.SOPA Images/Getty Images
  • GameStop soared 91% on Tuesday as retail traders continue to defy short-sellers.
  • Short-sellers have amassed a mark-to-market loss of $5 billion in the stock year to date.

GameStop climbed another 91% on Tuesday as the WallStreetBets Reddit crowd continued to squeeze short-sellers and pile into the stock.

Shares of the video game retailer skyrocketed as much as 145% to record highs of $144.59 per share on Monday before cooler heads prevailed and the stock came down.

Despite the fall from record levels, Gamestop shares have gained over 300% in January alone.

Advertisement

The GameStop saga all started when the WallStreetBets subreddit rushed into Gamestop stock on January 13, praising an activist letter written by Chewy's co-founder Ryan Cohen and calling on each other to squeeze short-sellers.

The stock closed 57% higher that day and by the time markets closed on January 14, GameStop share price had doubled.

Read more: MORGAN STANLEY: Buy these 9 sports-betting stocks ahead of the industry's expected legalization in 12 states this year and its growth to $10 billion in 2025

Advertisement

Since then, noted short-sellers like Citron Research have commented on the ludicrous nature of the jump and argued shares would fall back down to $20.

"The amount of people who are so passionate about putting GameStop higher not based on any fundamentals - it just shows the natural state of the market right now," Andrew Left, managing partner at Citron Research, said in a video.

The bearish news hasn't stopped shares from roaring higher.

Advertisement

As a result, short-sellers have amassed a mark-to-market loss of $5 billion in the stock year to date, according to data from S3 Partners. Still, despite increasing losses and a meteoric rise in share prices, short-sellers aren't backing down.

Over the last 30 days, GameStop's short interest has increased by 1.4 million shares.

Ihor Dusaniwsky, S3′s managing director of predictive analytics, explained the move to CNBC in an email, saying, "we are seeing a short-squeeze on older shorts who have incurred massive mark-to-market losses on their positions but are seeing new shorts coming in."

Advertisement

GameStop boasts two "buy" ratings, two "sell" ratings, and two "neutral" ratings from analysts with a median price target of $11.96 per share.

Read more: GOLDMAN SACHS: These 22 stocks still haven't recovered to pre-pandemic levels - and are set to explode amid higher earnings in 2021 as the economy recovers

{{}}